Goldman Sachs highlights dividend‑paying data‑center power stocks

Equinix reported $2.44 billion of Q1 2026 revenue, a 10 % year‑over‑year increase, while Digital Realty posted 16 % sales growth and a $1.8 billion backlog, underscoring the strong demand that prompted Goldman Sachs to feature dividend‑paying data‑center power stocks in its newest “Ten Buys” list【1】.

Strong earnings boost data‑center REITs

Equinix’s 10 % revenue rise beat most analysts’ expectations for modest growth as AI‑driven workloads expand capacity needs【1】. Digital Realty’s 16 % sales jump and $1.8 bn backlog signal a pipeline of new contracts, while vacancy rates in key U.S. markets stay near historic lows, tightening supply【1】. These fundamentals have helped the three highlighted REITs—Equinix (1.92 % dividend), Digital Realty (2.82 % dividend), and Iron Mountain (2.81 % dividend)—maintain attractive total‑return profiles despite dividend yields lower than five years ago【1】.

Goldman adds midstream power to the data‑center theme

Goldman’s “Ten Buys” list pairs the traditional data‑center REITs with midstream firms that supply power to those facilities. Kodiak Gas Services, a Texas‑based natural‑gas compressor, offers a 3 % dividend and is projected to grow EBITDA at roughly 15 % annually through 2030, driven by its “behind‑the‑meter” power generation strategy that helps data centers avoid grid constraints【2】. Williams Cos, a large‑cap natural‑gas infrastructure player, carries a 2.8 % dividend and is expanding its behind‑the‑meter projects, including a new high‑quality hyperscaler deal and a Northeast data‑center pipeline contract【2】. Both stocks have outperformed the broader market this year, with Kodiak up about 75 % and Williams up roughly 24 % YTD【2】.

Competitive landscape and valuation

All three REITs retain buy ratings from top Wall Street analysts, with price targets ranging from $225 for Digital Realty (Truist) to $1,260 for Equinix (Citi)【1】. The midstream picks also enjoy strong analyst support—15 of 15 analysts rate Kodiak a buy or strong buy, and 20 of 25 rate Williams a buy or strong buy【2】. Consensus price targets suggest upside of 27 % for Kodiak and 12 % for Williams, while Goldman’s own targets imply even higher upside—over 36 % for Kodiak and near‑12 % for Williams【2】. These valuations reflect the perceived scarcity of data‑center power and the growing need for reliable, on‑site generation.

What to watch

• Upcoming earnings releases from Equinix, Digital Realty, and Iron Mountain for Q2 2026 guidance on revenue and backlog trends.
• Kodiak Gas Services’ next “behind‑the‑meter” partnership announcements, which could accelerate its EBITDA growth path.
• Williams Cos’ pipeline expansion updates, especially any new data‑center contracts that could lift its dividend sustainability.

Goldman’s inclusion of dividend‑paying midstream firms alongside traditional data‑center REITs highlights a broader shift: investors are seeking stable income and exposure to the AI‑driven infrastructure boom, but the real test will be whether power‑supply constraints tighten further and drive earnings growth for these “old‑school” players.